Financial Advisor Tells Many Millenials to Forego Dreams of Homeownership

MCLEAN, Va. - June 20, 2016 - PRLog -- According to the United States Census Bureau, young adults today are more likely to have a college degree, but more likely to also live in poverty.  At the same time, the number of millennials has just passed the numbers of baby boomers, making millennials the largest living generation in the U.S.-75.4 million millennials versus 74.9 million boomers. "Statistics show that millennials are making approximately twenty percent less than people the same age a generation ago," stated Christopher Krell, CFP, CFS, a leading national authority on personal finance, investment, taxes and charitable giving. Krell began working with millennials when his high net worth clients began asking him to consult with their children. "Although the parents have money, they're determined not to spoil their kids," explained Krell. "They wanted their kids to carry on the family work ethic, get a good job and live on their own; however, in most cases this isn't how it's working out.  Millennial children are unemployed or under-employed and, in many cases, still living at home."

Krell has observed a strong sense of entitlement with millennials that serves as a barrier to employment. That, coupled with a tough economy has left many millennials unemployed. "For the parents of many millennials success meant getting a good education and then sifting through the job offers," he explained. "Today, due to economic downturn, there are not a large number of good paying available jobs and young people are finding themselves in low level positions (the lucky ones) while others can't find anything and many have student loan debt equivalent to a small mortgage."

Krell has advised many millennials not only to give up the dream of home ownership but to also look at taking on roommates. "With a growing number of luxury apartments being developed for baby boomers, millennials are losing in the rental market as well as home ownership," he said.  One millennial client was shocked recently when Krell told her that the smartest financial route for her was to bring a roommate in to share on her rental apartment. "The only way to get out of this debt cycle is to minimize all expenses," Krell advised.  "Find any way you can to cut back-take public transportation, ride share or bike to work, get a roommate, eat at home instead of eating out, and keep outside entertainment expenditures to a minimum."

"Housing costs have skyrocketed while wages and job opportunities have declined," explained Krell.  "Millennials need to focus on paying down credit card debt and also saving.  Ironically, recent reports demonstrate that millennials are saving but their income levels are often so low that they can't save as much as they'll need for the down payment on a home or for retirement."

The fact that so many are living at home has impacted the housing industry in many ways including the fact that many parents in their 50s and 60s are reluctant to downsize because their adult children are still at home.  This is impacting the housing market by causing decreases in housing inventory, rising home costs and lack of movement in the starter home market.  "When the entry level buyers stop buying, it hurts the entire buying chain," Krell explained.

Krell provides the following tips to millennials:

·         It's critical that you become independent.  If you're not living on your own, work to get out of your parent's house as soon as possible.  This may mean living in a group house, renting a room somewhere or taking on roommates in an affordable apartment or house rental.

·         Pull out all of the stops in finding a job. Network with alumnae from your college or university. Develop an innovative resume and be persistent.

·         If you can't find a good paying job, consider taking on two (or more) jobs.  The key to getting out of debt is paying off loans and investing as much money as possible so that it begins to compound quickly.

·         Keep a diary of expenditures. Write down everything you spend. Review the list weekly and see if there are ways to cut. Clip coupons, forego eating out and spending money on entertainment.

·         Don't buy a car.  Instead, take public transportation or car pool. Instead of owning a vehicle use affordable rentals such as Zip Car when necessary.  Ride a bike.

·         See a financial advisor.  Without money or assets you may not be a prime customer but many advisor's will consult and help to set up a financial plan. There are also many resources online but do your homework first.

·         Read.  There are many articles on getting started, how to save, how to set up a financial plan and additional tips on cost-cutting savings.

·         Save whatever you can and as much as you can.  While it's also important to pay down debt (especially high interest credit), it's important that you begin to put some money into savings and investment. The longer you can save, the more money you'll have in retirement and getting started earlier is better as money will begin to compound and you'll be able to watch your savings grow considerably.

# # #

About Christopher Krell

Christopher Krell, CFP,CFS, is a principal with Cassaday & Company, Inc.  He has won many awards and accolades throughout his 18 years with the firm including, most recently "Top Financial Advisors 2015" from the Financial Times, and was ranked sixth by REP Magazine in its 2015 list of the "Top 50 NextGen Independent Advisors in the U.S." for the past two years. Krell has established himself as a trusted financial planner and advisor. For more information, visit www.cassaday.com/who-we-are/our-team/Staff/Krell-Christopher.